Bangalore: Azim Premji founder of the billion dollar Company, Wipro will be launching an endowment trust as part of its CSR activity.

The trust is modeled on the base of Harvard Management Company to fund it philanthropic activities. The trust will largely focus on leading the education initiatives which will be guided by Premji, and the trust will be led by KR Lakshminarayana, the current chief of Wipro's strategy and merger acquisitions.

The corpus will be funded by the profits of the small chunk of promoter equity in Wipro and will be operational from January of next year. This way Premji will reduce his holdings in the company which will help him comply with the new finance ministry rule that companies in India must increase their public shareholding to 25 percent.

Investment strategies for the non-profit organization is not yet discussed but the idea is to make it self-sustainable. Ajay Kela, President & CEO of the Wadhwani Foundation recently made a $5-million grant to set up the Wadhwani Research Centre in Biosciences and Bioengineering at IIT-Bombay. Kela said "Foundations that are well-endowed can have a significant impact on the social sector. If we invest $50 million in a programme that requires a total of $500 million to be sustainable, we engage other agencies such as governments and corporates who can provide additional funding to ensure the long-term success of the initiative."

But in contrast, the Premji foundation draws its funds from one single source which focuses mainly on Premji's philanthropic activities, and the area of education. In many ways, the trust will be similar to the $27.6-billion endowment corpus managed by Harvard Management Company, which supports the educational and research objectives of Harvard University, but experts from industry are skeptical about the endowment trust as such an idea to work for a longer period will need conservative management of funds and history proves that such non-profit organizations which draws their corpus from multiple sources have not had a very successful run in India.